Monopolizing World of Warcraft’s Auction House: An Experiment

In every MMORPG, the process of earning gold involves one of two things: time or money. There’s no such thing as a free lunch, or free gold. You either grind it out, killing monsters and killing time until you’re satisfied, or you buy the gold from an outside broker, with real dollars. But what if you could make gold using simple economics?

What follows is an account of the time I played World of Warcraft, and developed a system to generate gold through the auction house.

Background

For those of you not familiar with the game, World of Warcraft is your typical massively-multiplayer online fantasy role-playing game. It wasn’t the first, but it is the most popular and the standard by which most MMOs are judged. Players develop characters and level them through a virtual game world by fighting bad guys and doing quests. All of this has spawned a virtual economy of buyers, sellers, and traders eager to make their characters better.

To facilitate transactions between masses of players, each logging in at their own leisure, Blizzard created an in-game auction house, a kind of eBay for the WoW crowd. It’s a lot simpler of course, but the options to place bids or buy an item outright are there. If you can pick it up, you can (probably) sell it. From my standpoint, having an auction house in the game means having the potential to do things that you couldn’t normally do in the real world, like playing around with supply and demand.

Fun with the Auction House

I had a simple idea: buy out the entire stock of some item in the auction house, and then turn around and put it up for sale at twice the price. Control the supply, and set higher prices. Create a monopoly. Profit. Expand. And then repeat. Was it possible? Or was the market just too large to play around with? There was only one way to tell.

The one difficulty with this system is figuring out what to sell. Optimally, you should be selling items that are disposable (thus allowing recurring business), a basic necessity, or required for quests. I found all of these in Wool Cloth.

Wool is a disposable item used in a number of applications, most notably to create bandages that can heal players. It pops up as a requirement for blacksmithing, engineering, and tailoring recipes, and can be donated to major cities to increase a player’s reputation. It’s a low to mid level item, but since I was just experimenting that became a major benefit.

At the time, the average price for Wool was 2 gold for a stack, or 20 pieces (a stack being the maximum number of an item that a player can store in one inventory square).

I set my plan into motion by buying all of the wool that was priced between 2 and 4 gold. This was most of the wool market, minus a couple of stragglers hocking their wool for ludicrous amounts. I auctioned off about three-quarters of my supply at the 4 gold price, put the rest into storage, and logged off for the night.

The next day I opened up my (virtual) mailbox and found it filled with gold. Or at least, full of auction messages that contained gold, since you don’t receive auction proceeds automatically, you have to click through each message. (The folks at Blizzard try to maintain some realism) But the gold proved that the experiment had worked. Once, anyway.

But it didn’t matter. This was the trigger, the turning point in my World of Warcraft career. Grinding for experience points, killing monsters, even finishing quests – these would be secondary to my new hobby: manipulating the auction markets.

Every day I repeated the same auction strategy, buying up all of the wool cloth that I could find, reselling it at higher prices. Any time a competitor tried to undercut my prices, I bought their stock and resold it. And on the days that there was no wool available on the auction house, I took some out of storage and auctioned it at double my normal prices. Experimenting with different varieties of stack sizes, I found that a stack of 10 could sell for 4 gold just as easily as 20, even with cheaper stacks of 7 and 13 available. People just don’t want to deal with math and tend to ignore weird numbers.

Eventually, I expanded my business into the minerals market, buying and reselling copper and bronze bars. Then into enchanting materials.

There were a couple of quirks though. Not every market is exploitable. Skinning, which produces leather, is one of the most common money-making professions in WoW, simply because it’s easy to level (you skin the creatures you kill, basically). But that means there are massive amounts of leather up for sale on the auction house. And the demand for leather isn’t as great. My attempts to take over the leather markets weren’t exactly a success, and I was left with a bunch of surplus leather and a bruised ego.

Items that are too high-level (say, Felcloth) don’t work well either, simply because there are less players as you move up the level ladder. Less players equals less demand, which makes selling stuff far more difficult.

Why It Works

Why is it possible to complete fix the prices for certain items? I’ve thought of it as a mix of two different factors:

1. People are lazy.
2. Gold doesn’t hold that much real value.

No one wants to do to go out and farm wool cloth for themselves, so they buy it from the auction house, creating demand. And no one is going to cry about spending 4 gold for wool instead of 2. After all, it’s not real money.

Incidentally, even though I made thousands of gold running my auction operations, I didn’t make much use of it. Instead, I ended up giving chunks of it out to friends who needed to pay for epic mounts and the like. I kept myself moderately well-equipped, but most of the gold sat untouched during my play time. And six months after I started experimenting with the auction house, I quit the game for good.

Would this same trick work now? I’m not sure, honestly. This was 4 years ago, and the game has changed since then. I’d expect the economy to have changed as well. Inflation isn’t fun. But World of Warcraft is still a game, and people are still lazy, so I don’t see why not.